Credit crunch hits mobile

Credit crunch hits mobile

The mobile sector is feeling the squeeze of the economic downturn, Mobile’s survey on the climate on the shop floor reveals. Costs are being cut in most companies and retail staff have been the first to feel the pinch in their income.

The majority of people working in mobile retail – both in the independents and the big chains – say they are finding it hard to make commission and, as a result, their monthly income is down.

Of all survey respondents, across the mobile industry, three quarters say they are left with less money at the end of the month compared with one year ago because of higher living costs and lower incomes.

Distributors, the section of the industry that has gone through a tough time over the past year, still seem to have more confidence in the market than other parts of the industry. Almost half of the respondents from distributors say that there is more confidence in their company now than there was a year ago.

But worryingly a third of the respondents from distributors feel there is no change in the level of confidence from last year, when the distribution market was in turmoil and 22% feel that there is even less confidence.

Almost half of those who took part in the survey say that costs have been cut in their company in the past year. Vodafone saw some significant cost cuts, which led to mid-ranking redundancies and reshuffles earlier this year. Similarly, Phones 4u and Carphone have both initiated ‘restructures’ and redundancies of mid-level managers. Only a third of respondents say they have seen an increase in the number of customers over the past year.

Dealers, however, are a group featuring prominently among those that say they have seen a fall in the number of customers over the past year. Retail in general is the front line when it comes to cutbacks in consumer spending.



Income changes

The lower retail spend that has hit high streets is showing in the mobile sector too. Networks and the large multiple mobile retailers like Phones 4u and Carphone Warehouse are tightening their purse strings and the shop staff feel they have been hit with lower monthly takings, the survey reveals.

Basic salaries have changed very little for shop staff, the survey shows, but many have been hit by lower monthly commission than what they have been used to.

Overall, two thirds of shop staff say they find it harder to make commission now then they did a year ago, while only 23% say it’s easier.

Most retail staff also feel that the amount of commission they take home at the end of the month has fallen. Thirty-seven percent say the commission they make is significantly less, and 46% say it is slightly less than it was a year ago. Only 14% of survey respondents from the major retail stores say they are making more commission compared with last year.

3 trialled a different commission structure, based on volumes rather than shop targets, over the summer. The survey shows that the vast majority of the operator’s store staff say it’s now harder to make commission and that they make significantly less than they did last year.

Carphone’s dramatic move to completely cut out commission hasn’t had an impact on staff earnings yet. A large chunk of Carphone staff’s earnings currently comes from commission so, once implemented, the pay structure overhaul is likely to make a massive change to staff earnings.

T-Mobile has recently seen commission changes, which were implemented from the start of this month. Similar to 3, shop staff are now paid according to the number of boxes they shift, instead of commission being tied to store targets. The impact, however, has not been registered in the results.

The changes got a mixed reaction from T-Mobile store staff when they were announced at the start of September. Some felt that bigger stores with higher footfall would benefit more, while others welcomed the simpler system.

Work conditions

Pressure from higher up in the company has also mounted since last year. Almost two thirds of the survey respondents from retail say they are under more pressure from their bosses.

Shop managers are especially feeling the pressure. Over three quarters of managers and assistant managers who replied to the survey say they are under more pressure from their bosses now than they were a year ago.

Just under half of all sales staff feel more pressure than they did last year, and 37% say there is less pressure.

One of the main causes of pressure for managers as well as shop staff could be the cut in costs most companies are experiencing. Fifty-five percent of retail respondents say costs had been cut in the company they work for over the past year, and half of those say cuts had been significant.

Cuts in costs have led to longer working hours in retail. Just over half of the respondents said that they are now working longer hours than they did a year ago, while 38% said there had been no change in their working hours.

Phones 4u staff are especially feeling the pinch. As a result of a recent board review, the company decided to take steps to ‘streamline the business’. This resulted in 60 office jobs being made redundant and the IT side of the business being outsourced to India, and the uneasy feeling has filtered down to retail. Three quarters of the Phones 4u

Written by Mobile Today
Mobile Today


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